FSC opposes ASIC product intervention powers
The Australian Securities and Investments Commission (ASIC) should not be granted a product intervention power because it would likely stray into the field of mandating permissible products, according to the Financial Services Council (FSC).
In its final submission responding to the Financial System Inquiry (FSI), the FSC has expressly opposed the recommendation to allow ASIC to have product intervention powers.
According to the FSC, such a move would be a step too far given that the regulator "already has wide-ranging powers which allow it to act where there have been breaches of the law or license conditions".
"The introduction of a new discretionary power would see ASIC stray into the field of mandating permissible products, a role which is properly the responsibility of the legislature," the submission said.
Further, it suggested that if such a power were granted to ASIC, it should only "be exercised as a last resort, be constrained through robust accountability and oversight mechanisms, and that clear guidance be provided regarding the circumstances in which ASIC might exercise the discretion".
The submission said the FSC supported ASIC being provided with the powers necessary to carry out its mandate, "but has serious concerns regarding the introduction of a new product intervention power and the ability for ASIC to block material changes in ownership/control of financial services licensees".
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